State of the market after post-election highs

The crypto market moves fast. One minute, we’re celebrating record highs, and the next, we’re battling presidential meme coins cams and the largest hack in crypto history. The past month or so has been a reality check for many. Following the U.S. presidential election, markets initially surged, but recent shifts have brought fresh challenges.

Let’s break down what’s been happening:

• U.S. President Donald Trump launched a meme coin. It saw early enthusiasm but quickly lost momentum, raising questions about its long-term value.

• Melania followed up with her own. Because one wasn’t enough.

• Speculative meme coins flood the market. The search for quick gains continues, but sustainability remains uncertain.

• The Central African Republic launched a meme coin. Another country experimenting with digital assets.

• An Argentina president-linked meme coin experienced a collapse. The broader market reacted, contributing to volatility.

• And most recently, Bybit (one of the largest global exchanges) was hacked for US$1.5 billion worth of Eth by North Korean hackers.

Speculation and cycles

Crypto has always faced challenges with speculation and unsustainable hype cycles. We’ve seen this before (FTX, Luna, 3Arrows Capital, Celsius) and today with the presidential scams and the Bybit hack. While these events can shake confidence in the short term, history has shown that the market eventually stabilises and liquidity returns.

Right now, sentiment is cautious. Many speculative assets have declined sharply, Solana has seen a heavy pullback, retail participation appears exhausted, and BTC dominance is rising as investors look for stability.

Alts are done? Not so fast

Some are questioning the future of altcoins, given the current downturn. Bitcoin remains the dominant asset, but history suggests that cycles of volatility don’t mark the definitive end of altcoin performance.

Some believe the speculative peak was in December and January, when AI tokens went parabolic and ridiculous tokens like Fartcoin hitting ridiculous valuations (>US$2 billion). However, with Bitcoin’s market share holding above 50% since mid-2023 (unlike in 2021, when altcoin activity drove it lower for months), the market structure still leaves room for potential shifts.

When sentiment leans overwhelmingly toward Bitcoin as the only play, it’s worth asking whether that consensus might change again. Historically, when BTC’s dominance has peaked, altcoins have seen renewed interest. Whether that will happen soon remains to be seen.

BTC: Holding stronger than it feels

Despite the recent market turbulence, Bitcoin is still hovering around US$100K, ranging between US$90K and US$105K, levels that seemed improbable just months ago. This is on the back of a continuous flow of bad news. And when bad news fails to drive prices lower – it can be a strong indicator that the market has bottomed out.

Under different conditions, a US$1.5 billion liquidity drain—such as the Bybit hack—would have triggered a significant sell-off. Yet, the lowest price since the hack has been only a brief wick below US$95K. Add to this the fact that the hack followed a slew of bad headlines for crypto, and it seems the market may be signaling a bottom. 

If the broader cycle isn’t over (and history suggests there’s still room to run), current conditions could mark an important period of recalibration. Sentiment has fluctuated before, and when bad news fails to shake the market, it often means the next move is higher.